Pay creators on Collabs

Creators who actively collaborate with you on Shopify Collabs can earn affiliate commission for promoting and selling your products. Affiliate commissions can be earned by a creator through affiliate links or discount codes that are created and tracked through Shopify Collabs. When a creator’s audience makes a purchase using an affiliate link or code, the creator earns an affiliate commission and the appropriate amount will be processed to the creator.

Payments

Commissions to creators are processed through your Shopify bill automatically using Collabs automatic payments. They display on your Shopify bill as a separate item called Shopify Collabs Commission.

Note

If you joined Collabs before April 27, 2023, then creators could be paid for commissions earned through Shopify Collabs by using the manual payments feature. However, this feature is no longer available after January 8, 2024. All outstanding manual payments must be settled before February 28, 2024.

To check for outstanding manual payments, refer to the Outstanding manual payments tab in your Payments table in Collabs.

Automatic payments

All affiliate commissions from future orders are first subject to a holding period. During this period, the commission of canceled and fully refunded orders are automatically canceled. Also, during this period you can open a payment dispute. The default holding period is 30 days, but this can be changed in your Shopify Collabs settings.

Steps:

1. In your Shopify admin, go to Apps > Collabs > Payments.
2. Click Settings.
3. In the Payment holding period section, enter a holding period between 1-90 days.
4. Click Save changes.

After the holding period is over, the commission is automatically added to your upcoming Shopify bill (or sooner if you've reached your billing threshold). After you pay your Shopify bill, the commission is paid out to your Collabs creators if they have activated automatic payouts on their side.

Note

Every creator you work with also needs to activate auto-payouts on their side to get paid through PayPal or bank transfer. If they have not activated auto-payouts, then the commission after the 30-day holding period will move to the 'waiting for creator' state.

There is a 2.9% processing fee applied to every automatic commission payment, which is reflected in your Shopify bill. For example, if your affiliate product sale total is $100 USD and commission earned by the creator is 10%, then the 2.9% processing fee will be 29 cents.

Moreover, automatic payments are handled in USD and charged to you in the currency of your Shopify bill. If your Shopify bill is in a currency other than USD, then local currency conversion fees might apply. Likewise, if a creator chooses to cash out in a currency other than USD, then a payout currency conversion fee is paid by the creator.

Manual payments

Caution

As of January 8, 2024, no new commissions earned by creators on Collabs are tracked using manual payments. All payments are tracked and processed to creators using automatic payments through your Shopify bill. You can settle any outstanding manual payouts using PayPal until February 28, 2024, after which, this feature will no longer be available and you'll need to use other payment services outside of Shopify to settle any outstanding manual payouts.

Using manual payments, you pay your outstanding affiliate commission manually either through Collabs' integration with PayPal, or outside of Collabs and mark the payment as paid in Collabs.

You can view outstanding and historical manual payments from the Payments page in the Shopify Collabs admin.

To activate manual payments through PayPal, you must have a PayPal Business Account, and you must have PayPal Payouts activated. For any issues settling existing manual payouts through PayPal, reach out to PayPal Support.

Payment disputes

If you're paying affiliate commission through automatic payments, and you find commission in the holding period to be suspicious, then you can open a dispute with the creator.

Dispute a payment

1. Go to the Payments page of your Shopify Collabs admin.
2. Click the Holding period tab.
3. Click the creator that you want to create a payment dispute for.
4. Click Open dispute.
5. From the Reason for dispute drop-down menu, select a reason for the dispute that you're creating.
6. Optional: To cancel the creator's active offer and any pending gifts, select Pause connection with this creator.
7. In the Orders from field, select a date that you want to dispute the creator's orders from.
8. In the Message for the creator text field, enter a message or use the pre-filled text.
9. Click Confirm.

Resolve a dispute

After you've discussed a dispute with a creator, you can select whether to pay for their orders. When you resolve a dispute, the creator is notified by email about the outcome of the dispute.

Steps:

1. Go to the Payments page of your Shopify Collabs admin.
2. Click the In dispute tab.
3. Click the creator that you want to resolve a payment dispute for.
4. Click Resolve dispute.
5. On the creator's profile page, do any of the following:
   • To cancel the creator's commission:
     1. Click Cancel commission.
     2. Select Cancel commission and stay connected to cancel the commission but stay connected with the creator, or select Cancel commission and pause connection and incentives to cancel the commission and pause your connection with the creator.
     3. Click Cancel commission.
   • To pay only some of the creator's pending commission and cancel the remainder:
     1. Select the orders that you want to pay for, and then click Pay creator.
     2. Select Pay commission and stay connected to pay some of the commission and stay connected with the creator, or select Pay commission and pause connection and incentives to pay some of the commission but pause your connection with the creator.
     3. Click Pay creator.
   • To pay all of the creator's pending commission:
     1. Select all the orders, and then click Pay creator.
     2. Select Pay commission and stay connected to pay all the commission and stay connected with the creator, or select Pay commission and pause connection and incentives to pay all the commission but pause your connection with the creator.
     3. Cick Pay creator.

High risk creators

Shopify might automatically open a dispute with a creator that you're in an approved partnership with if they violate the Collabs Community Guidelines. Community Guidelines violations include, but aren't limited to, discount code leaks, paid ads activity, suspicious social media activity, and owning a suspicious website.

When Collabs opens a dispute against a creator, any commission that they were earning is put on hold. You need to decide how you want to resolve the dispute with the creator, by paying or canceling some or all of their commission.

If you don't resolve the dispute directly with the creator within 30 days, then Collabs will:

• Pause your connection with the creator.
• Cancel commission, gifts, and the creator's affiliate links and discount codes.
• Inform the creator about these changes.

Taxes

Note

It's your responsibility to consult with local tax authorities or a tax professional to ensure compliance with your tax obligations.

A creator's services might be subject to sales or use tax. The responsibility to determine if taxes are payable are on the merchant and creator. For payments that are processed to creators with automatic payments, aggregate commissions earned by creators are displayed on your standard monthly invoice, and in such cases, Shopify collects and files taxes related to the sale of creator's services in certain jurisdictions in accordance with applicable law. For more information, refer to the Collabs Terms of Service.

If you’re a merchant who makes payments to creators during the year, then you might be required to issue them a Form 1099. This tax form is used to report the income earned by freelancers or independent contractors and is necessary for tax purposes. Merchants and creators in all cases have the responsibility to comply with their respective tax obligations, including reporting and remitting any applicable taxes and tax forms.

Activate W9 form collection

Merchants that are based in the United States can activate W9 form collection. When this option is activated, Shopify Collabs requests W9 forms from creators. If a creator doesn't submit a requested W9 form, then their payouts are limited to $599.99 USD per year.

Steps:

1. In your Shopify admin, go to Apps > Collabs > Payments.
2. Click Settings.
3. In the Creator tax forms section, select Collect W9 tax forms for all US creators on automatic payments
4. Click Save changes.

You can deactivate W9 tax form collection at any time by going to the Collabs app, and then going to Settings > Payments. Additionally, any W9 forms that were sent out and are blocking creators from surpassing $599.99 USD won't be rescinded.